Budget build: new graphics card or more ram?

I'm looking for the most practical way to get the most out of this little budget build. I play games like Source and COD4 (and eventually StarCraft 2) but it doesn't seem like it's performing to it's full potential (Source doesn't run a WHOLE lot better than it did on my old Athlon 64 3000+/1GB ram/7600GT build.)

Would I be better off getting a different graphics card that would better utilize what I already have? OR should I spend the extra money and get 4GB ram? Because I understand that 4GB is pretty much the standard these days, but it seems like graphically my system should be performing better than it does, even with just 2GB ram. Here's what I've got.
Athlon 64 X2 5200+ 2.7ghz
2GB G.Skill DDR2 800
Sapphire HD 4670 1GB DDR3

Also, Windows 7 or Windows XP?
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  1. You will get the better gaming performance increase with a new GPU over adding 2 additional GB of RAM. Most games do need more than 3GB of RAM and the games you play will be fine with 2GB. Your increase will come from the more powerful GPU.

    Also, I would recommend overclocking your CPU to 3.0Ghz or 3.2Ghz for additional power and performance.
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